When is the right time to buy a house?

So you’re a first-time homebuyer and ready to hit the housing market. But have you gotten confused on figuring out if this is the right time to buy a house for you? Check out some advice that Movement’s loan officers have to offer.

Q: When is the right time to buy a house?

A:“The right time to buy a house for you may be the exact wrong time to buy a house for someone else. The truth is that pulling the house-buying trigger is based on your personal and financial goals. However, there are some basic guidelines that are helpful to consider.

First, you probably do NOT need a 20% down payment. Homebuyers can often benefit from programs with much less down, but I do suggest that you have a healthy, monthly income flow. This means that what you make and what you spend each month leaves a cushion for unexpected costs.

If you already have every dollar you make earmarked (and haven’t considered a savings for when the water heater dies), you’re most likely not going to be a happy homeowner. A monthly cushion matters and is a great indication of the time to buy a home.”

“If you’re renting and know you’ll be in the same place for a while, then now is the right time to buy a home. Every buyer’s situation is unique, with their own goals and benefits to homeownership. That’s why it’s important to have a detailed conversation with your loan officer to discuss options for long and short-term benefits.

I think a lot believe they aren’t ready – they’re concerned about monthly payments being more than their rent. They want to time the market better. Or they simply don’t think they’ll qualify.

I’m here to tell you it doesn’t matter what the market does if you plan accordingly. It’s cyclical; It will always come back. You can protect yourself with a 30-year fixed loan, if qualified, and find a home that you could likely rent to cover the payment (or most of it) if you were to lose your job. If you can take emotion out of the picture when it comes to buying a home (though not ever the easiest case) and truly look at numbers, then the purchase will speak for itself.

You need to ask yourself what is the “cost of waiting”. Is it rising home prices? Rising rates? Both? What about all that rent you’ve been paying?

Let’s also assume the market goes down, for those skeptics. Can you afford your mortgage payment? Can you rent out to cover most or all of the payment? As long as payments continue, whether by you or by a tenant, then you’re okay to ride out the market until it recovers. For the record, I don’t believe this is something to be concerned about any time soon. We’re not in the same market as 2007.

We’re no longer in a short-term investment market. Buying a home is a long-term investment of at least 5-15 years. If you think that you will need to sell prior to this timeline, purchasing might not be the best benefit for you, and should explore deeper options if so.

Life events may happen that will cause kinks in strategies for purchasing a home. Exceptions of course apply: There is no blanket policy for everyone. But if you can find something that you’re comfortable with, you should buy.”

“Buying a home can be a good investment, but it isn’t the best option for everyone. The first thing you should consider is how often you will need to move for work. If you own a home, you have to sell it before moving. But if you rent, then you can move at the end of your lease.

Secondly, you have to be financially stable, which means being able to maintain a budget while saving for emergencies. Can you afford the upfront costs? If you have 3 months of mortgage payments saved up (plus around 6% for closing costs), that is a good start.

It is a very good idea to have a three-month emergency fund saved as well. If you have been in a stable job or field for two years and don’t see that changing suddenly, homeownership could be an option.

Taking a homebuyer’s education course is a great idea, and by educating yourself on the responsibilities involved it will help you become a confident homebuyer.”

About the Author: AJ Ramirez

AJ Ramirez serves as a contributor to content creation for Movement's marketing department. When he's not furiously typing away or trying to pitch illustrious ideas, you can find him jet-setting to try to settle his wanderlust and FOMO, taking a class at the local dance studio, or crushing yet another Harry Potter trivia.